St. Petersburg authorities caught in violating competition law when choosing contractor for Zenit Arena

St. Petersburg authorities caught in violating competition law when choosing contractor for Zenit Arena
Photo: Photo: Yevgeny Yegorov / Vedomosti

The contract price was more than 950 million rubles ($16.8m).

The St. Petersburg Directorate of FAS (Federal Antimonopoly Service) recognized the actions of the City Construction Committee when ordering works on the Krestovsky Island as a violation of the law on protecting competition, reported the FAS Directorate website.

According to the antimonopoly service, the committee limited competition by concluding a state contract for additional works in the western part of the Krestovsky Island and at the stadium named after Kirov (formerly Zenit Arena, and now St. Petersburg-Arena) with a single supplier, Metrostroy OJSC. The contract price was more than 950 million rubles ($16.8m).

During the consideration of the case, the committee explained that it had not held a tender, but concluded a contract with a single supplier because of an "emergency force majeure", but these arguments were not accepted by the antimonopoly authority.

At that, the FAS Directorate’s commission established that the contract provides for works on improvement and new construction, and not for liquidation of consequences of "force majeure or emergency situation".

"Moreover, the need for these works and services arose not immediately and spontaneously, but had been quite predictable; therefore, the customer had the opportunity to monitor the situation and conduct competitive procedures on time," the Service said.

For such violations, Art. 14.9 of the Code of Administrative Offenses of the Russian Federation provides for a fine for officials between 15.000 to 50.000 rubles ($265 to $885).

It is to be recalled that the city authorities estimated the total cost of construction of Zenit Arena, which lasted for 10 years, at 43 billion rubles ($760.2m), and social activists, including Alexey Navalny’s Anti-Corruption Foundation and Transparency International, believe this amount is understated by at least $88m.

As expected, on June 17, the arena on the Krestovsky Island will host the opening match of the Confederations Cup, in which the Russian and New Zealand national teams will meet. In total, the arena will host four matches of the tournament, including the final one.

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